Chicago PMI Rises In May

The Chicago Business Barometer, also known as the Chicago Purchasing Manager's Index, is similar to the national ISM Manufacturing indicator but at a regional level and is seen by many as an indicator of the larger US economy. It is a composite diffusion indicator, made up of production, new orders, order backlogs, employment, and supplier deliveries compiled through surveys. Values above 50.0 indicate expanding manufacturing activity.

The latest Chicago Purchasing Manager's Index, or the Chicago Business Barometer, rose to 54.2 in May from 52.6 in April, which was below the Investing.com forecast of 55.1. Values above 50.0 indicate expanding manufacturing activity.

Here is an excerpt from the press release:

“This was the second increase in business sentiment this year, with firms having longer order books and thereby raising production. However, they kept employment close to the neutral level amid a lack of adequate skills and volatility in demand,” said Shaily Mittal, Senior Economist at MNI.

“There is no getting away from the general softness in the data. Indicators are significantly below their last year averages but are moving towards their long-term means, implying that if business conditions are not as bright as they were, they are not bad either,” she added. [Source]

Let's take a look at the Chicago PMI since its inception.

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Here's a closer look at the indicator since 2000.

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Let's compare the Chicago PMI with the more popular national ISM Manufacturing Index. Both indices clearly follow one another with the ISM falling slightly lower on average. Note the ISM Manufacturing indicator is through the previous month.

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